United Utilities Water Fined

RNS Number:8302Y
Water Services Regulation Authority
22 June 2007


PN 20/07                                                            22 June 2007


           OFWAT CONFIRMS #8.5 MILLION FINE FOR UNITED UTILITIES WATER

Ofwat today confirmed it will fine United Utilities Water #8.5 million for
breaching rules governing trading arrangements with associate companies. The 
fine relates to the period October 2005 to March 2007.

Ofwat Chief Executive, Regina Finn said:

"This fine of #8.5 million sends a strong message to United Utilities Water and
the rest of the water industry that they must comply with their licence
conditions."

Ofwat received two responses to its consultation on the proposed financial
penalty which the Board considered at its June 2007 meeting. The Board decided 
that the #8.5m penalty was fair and reasonable, having regard to all the 
relevant factors in this case. The penalty will be borne by United Utilities 
Water's shareholders and will be paid to the Government.

In December 2006, United Utilities Water provided Ofwat with a legally binding
undertaking to stop non-compliant trading arrangements with associate companies
on or before 30 April 2007.

Notes to editors:

1.  The Water Services Regulation Authority (Ofwat) is the economic regulator of
    water and sewerage companies in England and Wales. It exercises its powers
    in a way that it judges will allow companies to carry out their functions
    properly, and finance them. Its duties include protecting the interests of
    consumers, wherever appropriate by promoting effective competition.

2.  On 18 April 2007, Ofwat gave notice, under and in accordance with section
    22A(4) of the Water Industry Act 1991 of its proposal to impose a penalty on 
    United Utilities Water. Ofwat invited representations or objections to the 
    notice to be submitted by 16 May 2007.

3.  Copies of the 'Notice of Ofwat's proposal to impose a penalty on United
    Utilities Water Plc', and accompanying press notice (PN 08/07) are available 
    on the Ofwat website, www.ofwat.gov.uk or from the Ofwat Library by phoning 
    0121 625 1373.

4.  On 22 June 2007, Ofwat gave notice, under and in accordance with Section  
    22A(6) of the Water Industry Act 1991 of its imposition of a penalty on 
    United Utilities Water.

5.  Copies of the 'Notice of Ofwat's imposition of a penalty on the United
    Utilities Water' will be available on the Ofwat website, www.ofwat.gov.uk

6.  Copies of the two responses received to Ofwat's section 22A(4) notice will 
    be available on the Ofwat website or from the Ofwat Library by phoning 
    0121 625 1373.

7.  During 2005-06, United Utilities Water breached its licence conditions by
    failing to establish prices by market testing for eight trading arrangements
    with associate companies. Seven of these arrangements continued in 2006-07.
   
8.  The #8.5 million fine relates to breaches that have taken place between
    October 2005 and March 2007. They relate to United Utilities Water's trading 
    arrangements with Vertex Data Science, United Utilities Facilities 
    Management, United Utilities Property Solutions, United Utilities Networks 
    and Your Communications (later THUS Group Plc).

9.  United Utilities Water must pay the fine by 10 August 2007.

10. The fine will be paid into the Consolidated Fund as required by the Water
    Industry Act 1991.


       Media enquiries to Ofwat Press Office on: 0121 625 1442/1496/1416
               Out of hours enquiries to: 0121 625 1300 




                      This information is provided by RNS
            The company news service from the London Stock Exchange

END

MSCFGGZVRMRGNZM